U.S. Postmaster General Patrick Donahoe said his agency is on a path to need a $45 billion taxpayer bailout within five years if Congress fails to take action to reverse growing financial losses for the Postal Service.
The Postal Service recorded a nearly $16 billion loss during its last fiscal year. Mr. Donahoe said Wednesday the shortfall is likely to grow worse without the ability to make significant cost cuts, including ending Saturday delivery and placing postal workers on a private health-care plan.
"Time is not on our side," he said during testimony to the Senate Homeland Security and Government Affairs Committee. "To preserve our mission to provide secure, reliable and affordable, universal delivery service--and do so without burdening the American taxpayer --the Postal Service needs urgent reform to its business model."
A majority of last year's loss was tied to defaults on required prepayments for future retirees' health care. On Wednesday, Mr. Donahoe said losses of that level won't be rare. He projected operating deficits of between $10 billion and $15 billion annually to continue without congressional action.
Last week, the postmaster said the agency would end Saturday delivery of mail but not packages, despite previous mandates from Congress to deliver six days a week.
That action drew an angry reaction at the hearing.
Sen. Jon Tester (D., Mont.) said the move could mean residents in rural Montana must wait five or six days to receive excepted mail. He said the change disproportionately hurts remote communities.
"If we're going to have a Postal Service that works for urban America, it damn well better work for rural America," he said at the hearing.
Write to Eric Morath at
eric.morath@dowjones.com
Corrections & Amplifications
This article was corrected at 12:37 EDT to fix the misstatements that anticipated operating deficits of between $10 billion and $15 billion annually didn't include payments tied to prepaying for future retiree health care, in the fourth paragraph. The deficit projections include those mandated payments.
. People are going to be livid if they have to pay a monthly fee to get their mail. However the USPS is protected by the Constitution if that means anything.